Mulroney’s business ties to Peladeau likely to keep him on election sidelines

Quebecor Inc. president and CEO Pierre Karl Peladeau, right, talks with former prime minister Brian Mulroney during the company's annual general meeting in Montreal Wednesday, May 9, 2012.

Photograph by: THE CANADIAN PRESS/Graham Hughes
, Postmedia News

Brian Mulroney is upset and disappointed by Pierre Karl Peladeau’s decision to run for the Parti Quebecois but is not likely to speak out against his longtime protege’s candidacy because he is a key part of Peladeau’s management team, say people who have spoken to the former prime minister.

Mulroney is the vice-chairman of Quebecor’s board of directors. Stock exchange filings show that in 2013, he earned $244,520 in compensation for his work for the company, plus an undisclosed sum in legal fees.

Mulroney is a partner at Norton Rose, which according to Quebecor’s 2013 Management Proxy Circular, is “principal legal counsel to the corporation.” Sources say Quebecor is Mulroney’s biggest client at the firm. Mulroney holds stock options in Quebecor worth $1,115,669.

Mulroney did not respond to a request for comment on Thursday.

Peladeau announced that he would run for the Parti Quebecois in Saint-Jerome, Que., on Sunday, revealing that he is a sovereigntist and that he wants to help make Quebec an independent country.

Peladeau promised to step down from the board of Quebecor, the company he inherited from his father.

Peladeau owns the majority of voting shares of Quebecor, which owns the largest circulation newspapers in Montreal and Quebec City, as well as TVA, which has the highest rated newscast in the province, as well as the Videotron cable company, a mobile phone service and many other companies.

Opposition politicians and journalists have complained that Peladeau should divest his shares in Quebecor to avoid conflicts of interest and to allow for fair media coverage of the election. He first said he would not do that, then subsequently agreed to follow the advice of the provincial ethics commissioner.

People who have spoken with Mulroney say he is upset and disappointed with Peladeau’s decision, which he only learned about on Friday, although in his only public statement — made to to Quebecor’s news agency — he avoided political comment.

“I think the important thing in something like this is that we live in a democracy,” he said. “People are entitled to pursue whatever political visions that they have, but once they make that decision they have to sever totally their relationship with any public corporation. Mr. Peladeau understood that, he submitted his resignation from all of his involvement in Quebecor and we accepted his resignation.”

Mulroney has a fiduciary responsibility to Quebecor shareholders but he is nonetheless in a strange position for a former prime minister, said Norman Spector, who was chief of staff to Mulroney from 1990 to 1992.

Spector worked for Mulroney in the aftermath of the collapse of the Meech Lake accord, a constitutional deal that would have recognized Quebec as a distinct society. Wrangling over Meech led to the departure of Mulroney’s Quebec lieutenant and former friend, Lucien Bouchard, who left to found the Bloc Quebecois and campaigned for an independent Quebec in the 1995 referendum.

“The whole scheme is predicated on (Peladeau) being able to take a leave of absence as it were, without losing value. Mr. Mulroney’s value is to maintain the value of that company so that at some point Peladeau or his heirs can benefit.

“Given the fact that he’s been associated with that company for many years he probably knows the company very well … Mr. Peladeau would feel a degree of reassurance that it won’t all go down the tubes. If all of that is correct, objectively, that puts Brian Mulroney in the position of enabling, facilitating, assisting Peladeau’s current activities.

“I find it a bit strange when we’re talking about the future of Canada, and we’re talking about a former prime minister of Canada, and we’re talking about a former prime minister of Canada who went to great efforts on the national unity front.”

A spokesman for Prime Minister Stephen Harper declined to comment Thursday on Mulroney’s business ties to Peladeau.

“Issues related to the Quebec election are for the voters of Quebec to consider,” said Jason MacDonald. “We will not intervene in the election.”

Mulroney has been close to the Peladeau family for many years. As a young labour lawyer in the 1970s, Mulroney helped negotiate the first collective agreement for workers at Le Journal De Montreal for Pierre Karl’s father, Pierre.

He has acted as a mentor to Pierre Karl, and is the godfather of one of his children.

Pierre Senior was reputed to be a sovereigntist, and was close to Rene Levesque, but maintained warm ties with Mulroney, reportedly dining at 24 Sussex. Pierre Karl also dined at 24 Sussex, La Presse reported this week, as a guest of Prime Minister Stephen Harper.

Mulroney is actively involved in trying to bring the Nordiques back to Quebec City, a project that Peladeau has been pushing for years, winning $400 million in municipal and provincial funding for a new stadium.

On Monday, the mayor of Quebec, Regis Labeaume, said that Mulroney regularly speaks to NHL commissioner Gary Bettman about the team. Labeaume sought to reassure voters that Peladeau’s move to politics would not hurt the city’s chances of wooing a team.

“Mr. Bettman is a businessman,” he said. “The Quebec sovereignty project will not bother him.”

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